Drafting Exclusion Clauses: Say What You Mean

Exclusions of Liability generally

When negotiating construction contracts, it is often the case that either or both parties will want to exclude or limit their liability in some way. For example, consultants will frequently try to limit their liability to match their professional indemnity insurance coverage. The parties will then negotiate what liability is excluded and/or what level it is capped at.

Do they cover fundamental, wilful or deliberate breaches of contract?

The recent case of Mott MacDonald Ltd -v- Trant Engineering Ltd arose out of a contract to upgrade facilities at RAF Mount Pleasant in the Falkland Islands. Trant Engineering alleged that Mott MacDonald had breached that contract "fundamentally, deliberately, and wilfully" and that it was entitled to damages of more than £5 million. Mott MacDonald denied being in breach at all but, in particular, doing so fundamentally, deliberately, and wilfully.